Driving Towards a Fintech Future

BySandyTan,HeadofEcosystems,InstitutionalBankingGroup(DBSBankHongKong)

If

I asked you to list the key differences between a bank and a fintech, what would they be? Whilst banks have more resources than fintechs, fintechs are frequently able to innovate more easily and with fewer constraints – such as legacy infrastructure or banking regulations. Conversely, whilst fintechs may be more agile, they may lack the extensive network, funding and long-held trust that banks possess.

At DBS, we aim to become less like a bank, and more like a tech company – both in terms of providing innovative and digitalfirst solutions to our customers, as well as transforming the way we work. It is therefore a great honour that our bank’s alternative data-empowered lending solution was recognised by the HKB Technology Excellence Awards in the Fintech – Banking category. This represents our continuous efforts to deliver innovative offerings and enhance financial inclusion for SMEs.

Since the onset of COVID-19 in 2020, there has been significant growth in SMEs’ need for digital services. After speaking to our merchant clients in the e-commerce sector, we identified an increased demand for working capital solutions to support their continued business development. DBS, therefore, sought out partnerships with logistics arms of China’s leading e-commerce platforms – JD Logistics and Cainiao – to create a collaborative ecosystem solution that leveraged our bank’s world-class digital capabilities, and SMEs’ alternative data to enable our partners to provide value-added services to their clients.

In 2019, we at DBS identified digital ecosystem partnerships as key to creating a superior customer journey for our corporate clients. By embedding our offerings into our partners’ supply chains and ecosystems, we could create seamless digital solutions for both new and existing DBS customers.

Leverages alternative data

Together with JD Logistics and Cainiao, DBS leverages alternative data sources to provide SME e-commerce merchants with working capital and enhanced financing solutions. As a result, the bank can rely on more current statistics to assess the business and enhance financial inclusion for newer businesses.

Traditionally, payment terms with overseas suppliers are mostly on a cash-on-delivery or advanced payment basis. As goods usually take months to be transported and distributed, the solution has hence greatly improved the efficiency of the supply chain for imported products and merchants’ cash flow which they need to finance their ongoing business operations by re-imagining the customer journey for our SME customers.

By seamlessly integrating our banking services into JD Logistics and Cainiao’s platforms, we have been able to provide SME merchants with a one-stop shop for their financing needs. Once JDL and Cainiao’s merchants have opened a DBS bank account, they do not need to leave their e-commerce or supply chain to apply for financing from DBS. With our digital capabilities and API connectivity, fund disbursals can be completed in as little as 15 minutes.

Supporting businesses

Since launching our alternative dataenabled lending solution with JD Logistics and Cainiao, DBS has been able to support the business growth and development of numerous e-commerce merchants. In June 2022, the bank successfully launched its newest partnership with GS1 Hong Kong. SME suppliers on GS1 Hong Kong’s ezTRADE platform can now leverage their trade data to access financing from DBS in a digital and straight-through manner – as opposed to the previously manual process of needing to submit hundreds of invoices every month. By leveraging alternative data, DBS and GS1 Hong Kong have been able to redefine the trade financing transaction journey for SMEs, whilst also providing a streamlined credit assessment process.

Following the launch of the Hong Kong Monetary Authority’s Commercial Data Interchange (CDI) in October 2022, DBS and GS1 Hong Kong announced a plan to further enhance the innovative SME trade financing solution with the Hong Kong Monetary Authority’s CDI platform. Our bank remains committed to taking an active role in further developing and growing Hong Kong’s robust fintech ecosystem and we look forward to bringing our solutions to the next level of customer experience.